It turns out investors are willing to forgive huge capital spending if a company's core business is thriving.

Tesla just reported its second consecutive year of declining revenue and profits, further complicating Elon Musk’s $1 trillion effort to transform his company into a leader in AI and robotics. Meanwhile, the global EV market continues to grow, seemingly in spite of the pioneering company’s setbacks.

Elon Musk said Tesla Inc. needs to build and operate what he is calling a “TeraFab” to manufacture semiconductors, a massive undertaking that will cost billions of dollars and mark another expansion beyond what had been the company’s core electric vehicle business.

Tesla Inc. plans $20 billion of spending this year to streamline its electric-vehicle lineup and shift resources toward robotics and AI, part of a sweeping set of changes pushing the company further from its roots as an automobile manufacturer.

Tesla CEO Elon Musk announced a $2B investment into xAI and the discontinuation of Model S and Model X in order to support Optimus robot production.